Morgan Stanley Downgrades NetApp (NTAP) Due to 15-Year Low in IT Hardware Budget Growth

NetApp Inc. (NASDAQ:NTAP) is one of the most undervalued quality stocks to buy right now. On January 20, Morgan Stanley analyst Erik Woodring downgraded NetApp to Underweight from Equal Weight, lowering the price target to $89 from $117.

This shift followed a CIO survey indicating the slowest hardware budget growth in 15 years, alongside reseller expectations of an elastic demand response to input cost inflation. The firm adopted a more defensive stance on IT hardware despite secular AI tailwinds and cited a perfect storm of cautionary factors emerging from its recent research.

Additionally, on January 13, Goldman Sachs analyst Katherine Murphy initiated coverage of NetApp with a Buy rating and a $128 price target. Although the firm projects the broader external storage market to grow at a modest 4% year-over-year in 2025, Murphy identified specific high-growth areas within various media and data storage categories. Based on these trends, the firm expects NetApp to maintain its leadership position in the expanding all-flash storage market.

NetApp Inc. (NASDAQ:NTAP) provides a range of enterprise software, systems, and services that customers use to transform their data infrastructures in the US, Canada, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. It has two segments: Hybrid Cloud and Public Cloud.

While we acknowledge the potential of NTAP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.